DP15344 The Political Economics of Non-democracy
We survey recent theoretical and empirical literature on political economy of non-democracies. Dictators face many challenges to their rule: internal, such as palace coups or breakdown of their support coalition, or external, such as mass protests or revolutions. We analyze strategic decisions made by dictators --- hiring political loyalists to positions that require competence, restricting media freedom at the cost of sacrificing bureaucratic efficiency, running a propaganda campaign, organizing electoral fraud, purging associates and opponents, and repressing citizens --- as driven by the desire to maximize the regime's chances of staying in power. We argue that the key to understanding the functioning and ultimately the fate of a nondemocratic regime is the information flows within the regime, and the institutions that govern these information flows.